Baroness Scotland of Asthal: My honourable friend the Minister for Policing, Security and Community Safety (Tony McNulty) has made the following Written Ministerial Statement.
	On 6 November, the Police Arbitration Tribunal's recommendation on the police officer 2006 pay award was received. The Home Secretary responded to this recommendation, agreeing to implement the 3 per cent pay rise for police officers, with effect from 1 September 2006. The Home Secretary also noted the tribunal's comment that we not only had,
	"the right but a duty to consider and put forward different factors and approaches which could be applied in determining police pay",
	and said that he would review how police pay is determined, including indexation, and would announce the terms of reference of the review shortly.
	Effective pay arrangements for police officers are essential for a modern police service which delivers high standards of community safety and security to the public. We must move quickly to put police officer pay on a sustainable basis. We cannot continue with arrangements which produce pay rises beyond the level which police authorities can afford to pay without detriment to service delivery. For that reason, we will establish a review of the way police pay is determined, reporting early in the new year and in good time to inform the 2007 pay round. Following this, I will also ask the review body to consider further changes to the police pay negotiating machinery. In particular, I am minded to place responsibility for determining chief officer pay within the remit of the Senior Salaries Review Body. The review that I have announced will look at this as part of its consideration of the options for replacing the current police officer pay determination arrangements.
	I have asked Sir Clive Booth to undertake the first part of this review and I am pleased to announce that he has accepted. Sir Clive will report to me in early 2007 with recommendations on the pay determination mechanism that we should use for next year. This, along with any other proposals for pay modernisation from the service or representative organisations, will be considered in the 2007 pay round. The Home Secretary and I will consider further how the second part of the review, looking at the police negotiating machinery, should be taken forward, including consideration of John Randall's report on the issue.
	The terms of reference for the review are:
	Part 1: to consider the options for replacing the current arrangements for determining changes to police officer pay for 2007 and make recommendations on this. The conclusions and recommendations in part 1 are to be framed so as to inform part 2 of the review.
	Part 2: to review the effectiveness of the negotiating machinery for the police, including the Police Negotiating Board and the Police Staff Council, and make recommendations for how police pay and other conditions of service should be determined. The review must consider the option of a pay review body for police pay and consider the impact of any proposal for determining police officer pay on the negotiating machinery for police officers.
	Both parts of the review must take account of the need for arrangements to reflect and support the following:
	The future requirements of the service for the effective and efficient delivery of policing services; motivation and morale; recruitment and retention rates; and overall affordability.Government policy on public sector pay and the broader economic and employment context, and consistency with the achievement of the inflation target of 2 per cent.The need to enable wider police workforce developments, including proper reward and recognition arrangements.Arrangements for pay determination in other parts of the public sector.Part 1 should report no later than February 2007; and Part 2 in autumn 2007.